THE BIG IDEA: Conducting more effective meetings is a constant challenge. How do you manage conflict and internal tensions while enhancing ideation and collaboration? Use the Six Thinking Hats.
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Do your meetings often become a political dance of excuse making? Do you consider most meetings you attend to be highly productive and results-oriented or are they mediocre and unnecessary?
THE BIG IDEA: How do you build a marketing program that attracts the maximum number of customers while simultaneously fostering loyalty? You start by segmenting your customers based on their commitment toward your business.
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Let’s meet three very different customers: Susan, Lisa, and Stanley.
Susan is looking for a stylish, new fall sweater. She makes her rounds to Target, Kohl’s, JCPenney, Macy’s, Banana Republic, and H&M. Susan is a non-committed shopper. We call her a Nomad.
Lisa needs a new pair of running shoes. She first stops at Dick’s Sporting Goods. If she doesn’t find something she likes or if they don’t have her size, she’ll drive over to Gander Mountain or perhaps Sports Authority. Lisa relates to Dick’s first. We call her an Enthusiast.
Stanley needs a new smartphone. He doesn’t have to research which one to get, he just has to walk into his local Verizon store and pick up the latest iPhone. Stanley loves Apple. We call him a Brand Lover.
Susan, Lisa, and Stanley represent three very different customers for your business: Nomads, Enthusiasts, and Brand Lovers. All three are important, but all three are NOT created equal. All three should not be given equal attention in marketing or product development.
To help chief executives better differentiate between different classes of customers, we created the Customer Loyalty Continuum.
Visualize loyalty on a straight horizontal line with less commitment or loyalty toward the left and more commitment and increasing loyalty toward the right.
Nomads are consumers who are not committed to any business in your category, nor are they even exploring a commitment.
Enthusiasts are consumers who have a preference for one or more brands, but have not yet made a commitment to any one particular brand.
Brand Lovers are customers who are unapologetically committed to a brand, because in their eyes, there is no equal.
In essence, the Customer Loyalty Continuum places your customers on a gradient of love, like, and indifference.
You can also classify your customers based on their overall mindset. You have customers with a transactional mindset and others with a relational mindset.
Susan is an example of a customer with a transactional mindset. Transactional shoppers think first. They shop on convenience, price, and location. The commodity, rather than the brand, is the main factor that counts.
Stanley is an example of a relational customer. Relational customers feel first. They have an emotional connection to the brand. They will often purchase from the brand based on how they feel, rather than what they think.
Even in a downturn economy, Apple offers some of the highest priced products on the market, yet this doesn’t dissuade their customers from making repeat purchases. Rationally speaking, it doesn’t make sense. But emotionally, it does.
The farther you go to the left of the Customer Loyalty Continuum, the more transactional your customers are. The farther you go to the right, the more relational they are.
Relational customers are more loyal customers.
So how do you build a marketing program that attracts the maximum number of customers while simultaneously fostering loyalty?
You start with customer segmentation. Customer segmentation is the process of dividing your customers into specific groups with similar characteristics.
Common characteristics for customer segmentation include age, gender, interests, common needs, and priorities.
Customer segmentation can help identify target customer groups and underserved market opportunities. It can be used as a means to allocate resources for marketing and innovation initiatives. It can help you differentiate yourself from your competitors.
But what’s the best way to segment your customers?
Businesses with a cult-like following tend to focus on their best customers, their Brand Lovers. They learn what drives their best customers’ behavior: what motivates them; what tensions and needs they hold; what they believe; what they aspire to be.
Then, they serve this customer group better than anyone else. Numerous studies highlight that chief executives of outperforming businesses tend to focus on knowing their customers. This customer obsession becomes an organizational focus.
In our work, we’ve witnessed time and again how when you apply penetrating consumer insights about a business’s best customers to a marketing program, staggering growth follows.
Does this mean you ignore the other customer segments on the continuum? Of course not. They are all important for your business.
But you can’t focus all of your marketing efforts on everyone, so why not focus the lionshare of your resources on attracting and serving relational, loyalty-driven, profitable customers (Brand Lovers)?
If you do, you’ll likely pick up more Enthusiasts and Nomads along the way.
Some customers have a religious devotion to a particular brand. They may go so far as to permanently scorch their skin with the logo or image of the brand they love.
While this may appear extreme to you, fifteen years of research into Cult Brands has shown us that the psychological reasons behind cult followings illuminate the drivers behind customer loyalty in any business.
So even if you don’t aspire to have customers tattoo your logo onto their heads, if you’re interested in creating loyal, profitable customers, there’s a lot to learn from Cult Brands.
Cult Brands create emotional experiences that lead to feelings of belonging, a sense of shared consciousness with a group of people. The customers of Cult Brands often feel like part of a family instead of consumers of a business. This is a powerful, emotional connection.
Apple, Harley, IKEA, Star Trek, Zappos, MINI, and The Motley Fool all invite their customers into their clan.
So how do they do it?
We’ve identified seven core rules that all Cult Brands tend to share. These rules are the fundamental tenets that all Cult Brands consciously or instinctively follow as they do business.
Keeping these rules in mind makes it easier to decide how to grow your business and foster loyalty.
The Seven Rules of Cult Brands provide a framework for ongoing business success. As you read through each rule, think about ways you can apply it to your organization.
Cultural anthropologist Margaret Mead summed up the challenge facing today’s marketers: “Always remember that you are absolutely unique. Just like everyone else.”
Your customers are driven by two simultaneous desires that appear to be diametrically opposed to each other. They want to stand out from the crowd and be a unique individual while simultaneously wanting (and needing) to be part of the crowd, receiving the social support and approval of like-minded individuals.
How do people meet these opposing needs? By belonging to a group they identify as being unique, often outside of mainstream society.
If you’ve got a home, you need furniture. The community of people who need furniture is considerable. But the community of people who need furniture with minimalist charm and serious organizational capacity (and enjoy quirky Swedish names) is smaller and distinct—just different enough to make IKEA irresistible to legions of their fans.
Your customers want to be part of a group that’s different. It’s that simple.
Even in the face of doubters and critics, Cult Brands dare to be different—and succeed. Cult Brands are successful because they are wholly unlike every other company in the marketplace.
Cult Brands believe in themselves, their products and services, and their customers. They want to challenge conventional wisdom and transform it when given the chance. Willing to take significant risks, the people behind Cult Brands are fighters and leaders, not quitters or followers.
When Whole Foods started in 1980, there were less than six natural foods supermarkets in the United States. Today, the natural and organic foods market is estimated at more than $28.6 billion.
Cult Brands, however, don’t waste their time or energy worrying about who is following them. Their attention is focused on how to better serve their customers.
Cult Brands sell more than a product or a service. Customers want more than just things; they are seeking experiences.
Experiential purchases are more meaningful than material purchases. As such, all Cult Brands sell lifestyles. They develop and sell “the tools” that help their customers pursue their dreams and celebrate distinct lifestyles.
Cult Brands remove barriers for their customers. The would-be musician no longer needs to shell out thousands of dollars for expensive instruments and equipment. They just need to download the right apps onto their iPad, and they’re ready to rock.
Apple promotes a creative lifestyle that facilitate self expression. Jimmy Buffett celebrates life as a party. The Life is good Company promotes a laid back weekend BBQ with friends.
Your customers have aspirations. Those aspirations are powered by emotions. If you can support your customers in the realization of their aspirations, they will associate their positive emotions with your business.
Cult Brands focus on serving the wants and needs of the customers they have. They have the ability to listen to their customers’ discontent and create solutions that build strong, enduring loyalty.
By listening, Amazon.com discovered that the high cost of shipping interfered with how often their customers made purchases. In response, they launched Amazon Prime in 2005, a program in which members enjoy unlimited free two-day shipping in exchange for a yearly fee.
It’s an initiative that has been more successful than anyone could have ever imagined. Over 20 million people are Amazon Prime members. The typical Amazon Prime member buys as much as 150 percent more than non-Prime members. It’s a powerful example of the results of listening.
Respect your choir. Listen to them. Value their opinions. Reward them. Never ignore an enthusiastic follower of your business. Remember that core followers all want to believe, but first they need to see miracles in the form of unexpected gifts and surprises.
Do extraordinary things for your choir and they’ll become incredible brand evangelists.
Cult Brands know how to start a cult. They build strong, ongoing relationships with their customers by developing and supporting customer communities.
Cult Brands aren’t afraid to use today’s profits to support customer communities to generate powerful, long-term goodwill for their businesses and their brands.
When possible, they establish social events that reflect their missions. MINI created their annual Take the State tour. Life is good puts on their popular Music Festival each year. Harley supports HOG Rallies worldwide. (We attended their 105th Anniversary event in Milwaukee and recorded the magic.)
You don’t have to earn your way into a Cult Brand by proving you’re cool enough. Cult Brands take it as a given that you’re already cool enough.
Cult Brands welcome customers of all ages, races, creeds, and socioeconomic backgrounds with open arms. They don’t discriminate against anyone who doesn’t fit into an idealized customer profile. Everyone is welcome.
Cult Brands prove to their customers that they are indeed open and inclusive by helping to fulfill the deep human needs that we all share, including belonging and self-esteem.
Deep inside every human being on this planet is a need for freedom.
According to Abraham Maslow, the feeling of freedom is a bridge to self-actualization: we want to be able to grow and express our own unique identity and worldview without fear of consequences.
Harley promotes freedom on the open road. Vans promotes freedom from convention. Linux promotes freedom of information. Apple promotes creativity and self-expression.
Cult Brands are empowering and expansive. When customers engage with a Cult Brand, they come away feeling like they can do more, and do it more effectively.
Integrating the Seven Rules of Cult Brands into your operations expands the number of ways you can tap into the forces of customer loyalty.
Consistent application of these principles will strengthen the bond you have with your existing all-star customers, while simultaneously creating new customers.
As your customers deepen their emotional connection with you, their loyalty will grow. Your organization will become stronger, more resilient, and more differentiated.
Oh, you’ll probably become more profitable too.
Our firm uses core values to help companies attract more profitable customers. Over time, we’ve discovered that our readers are predominantly inspired leaders. Core values play a major role in inspired leadership.
BJ Bueno joined Life is good CEO Bert Jacobs on the main stage of the National Retail Federation’s Big Show this past January to illuminate the powerful effects core values can have on today’s businesses. Core values helped Life is good build a $100 Million lifestyle brand.
Their talk, rated the highest of all keynotes given at NRF this year, is available to watch here. To assist you in the process of discovering your core values, today we offer you the ultimate guide for creating core values. We hope you enjoy.
Core values are part of a company’s DNA. They define what an organization stands for, highlighting an expected and ultimate set of behaviors and skills. A company’s values lie at the core of its culture. Values are fundamental, enduring, and actionable.
Driving priorities and decisions, values help determine how a company spends its time and money. The actual values of an organization are determined mainly by where it invests its resources and how its employees behave, not what the leader says or what’s posted on company walls.
When properly executed at the leadership level, core values play a fundamental role in attracting and retaining talented employees, making difficult decisions, prioritizing resources, reducing internal conflict, differentiating the brand, and attracting the right breed of customers.
Human capital is the lifeblood of today’s enterprises. Attracting top talent in a fast-changing global marketplace—and retaining them—takes more than high salaries and benefits packages. Talented people want to work in environments where they can develop and thrive. Top performers seek out organizations with values that match their own.
As a consequence, the importance of a company’s culture is becoming more apparent. Numerous research studies have highlighted that corporate culture is a primary driver for innovation.
When core values are successfully integrated into an organization, they set the foundation for their culture. Values set the climate of the workplace and help determine how success is defined and measured.
Taking core values serious is a major organizational initiative. Wondering if establishing an authentic set of core values can impact your business?
Here are 12 reasons CEOs should take core values seriously:
Core values are the standard operating principles that guide an organization’s culture—its employee’s behaviors, attitudes, language, and focus.
Here are over 100 examples of values from 12 organizations that value their company’s culture:
Notice how all of the above values are specific and actionable. They help define each company’s culture and encourage a specific type of behavior within each organization.
As the CEO and leader of your enterprise, this process begins with you—your interest, passion, and commitment to establishing a set of values that will guide your culture through decades of growth.
Taking the time to define your values, embody them, and to keep them fresh and alive in everyone’s minds are some of the most vital things you can do to promote a thriving culture.
Arriving at a concise and short list of values can be a daunting task. You can find lists of 300 values to choose from. However, we don’t advise using any predetermined lists.
Why? Values aren’t selected; they are discovered. Freely associating in a brainstorm sessions with your employees will invariably yield superior results.
Ready to get started? Here are seven steps to creating distinct and meaningful core values that will serve as a foundation for your corporate culture:
It’s too easy to presume we know the answer at the start and to therefore never truly embark on a creative discovery process. Adopting the the mind of a beginner—someone without any preconceived notions of what is—gives you access to more ideas and a fresh perspective on your business.
This is an important step in any kind of discovery process. In our firm, everytime we begin a new creative project or the discovery of psychologically-driven consumer insights for clients, we always start with a Beginner’s Mind.
We believe it is imperative to approach the discovery of core values without any preconceived notions and beliefs about your culture and your business. Simply taking a deep breath and momentarily clearing your mind may be all that’s needed. Remembering that your conscious mind doesn’t know all of the answers is helpful too.
The more experienced and engaged employees you can enroll in this initial process, the better. Set up meeting with your leadership team first. Have everyone list what they believe to be your company’s imperatives, ideal behaviors, desired skills, and greatest strengths.
Ask:
Your goal is discover the pre-existing values within your organization (assuming you’re not an early-stage start up). It will be difficult to reinforce values that aren’t already part of your organization’s ethos. It’s best to highlight your organization’s current strengths and build on them.
While some companies hire an outside consultant to help uncover their core values (which is appropriate at times), it is vital that you as a CEO are playing a role in facilitating the discussion. Your employees need to see that you’re taking this process seriously and that its not just some “corporate agenda” for appearance purposes. If you don’t take this process seriously, it’s unlikely your employees will.
If you are going to lead the discussion, however, be sure that you’re not shaping the conversation or influencing people’s answers.
Combining all of the answers from step 2, you now have a master list of values. If you and your team took this process seriously, you may have between 25 and 75 values. Obviously, that’s far too many to be actionable and memorable.
Your next step is to group these values under related themes. Values like accountability, responsibility, and timeliness are all related. Group them together.
If you have a group of values that include honesty, transparency, integrity, candor, directness, and non-political, select a word that you feel best represents the group. For example, integrity might work as a central theme for the values listed above.
This process is best done with a small team, but this brainstorm session can be an open meeting as well.
Now comes the hardest part. After completing step 4 you still might have a sizable list of values. Here are a few questions to help you whittle your list down:
You can’t be all things to all people. Your culture is unique. It should emphasize what matters most to your collective. It should highlight what makes your organization a place that talented people want to work. It should represent both your current and ultimate expression of your culture.
Strong values require difficult decisions to be made in order to uphold the values. Avoid prosaic or generic values (often listed in a single word, like “accountability”) because they won’t establish a strong, distinct culture.
In reviewing the cores from companies like Google, Zappos, and Amazon, you’ll notice that some of them are unconventional, even controversial. These values help create unique cultures. For example, Amazon.com’s “Have backbone; disagree and commit” is not a common core value for a multi-billion dollar retailer, but I bet this principle plays an important role in Amazon’s culture.
How many core values should your organization adopt? Too few and you won’t capture all of the desired behaviors and unique dimensions of your organization. Too many and your employees will get overwhelmed and they will lose their overall impact. While the number of core values differs for each organization, the magic range seems to be between 5 and 10.
Now creativity really comes into play. You’ll notice in the core values examples from successful brands that none of them list their values in a single word like Integrity, Accountability, or Fun. While a one-word value might be easier to remember, it is difficult for a single word to become a distinct expression of your culture. More importantly, it is incredibly difficult for a single-word value to trigger an emotional response with your employees.
Highlighting values into memorable phrases or sentences forces your organization to more succinctly define the meaning behind each value. It gives you the opportunity to make the value more memorable in the minds of your employees.
Be sure to enroll at least one strong writer from your team in this stage of the process. Here are a few tips and guidelines for crafting your values:
Use inspiring words and vocabulary. Our brains are quick to delete or ignore the mundane and commonplace. A phrase like “Customer Service Excellence” is not going to inspire you or your employees. Zappos’ “Deliver WOW Through Service” just might.
Mine for words that evoke emotion. Words and phrases that trigger emotional responses will be more meaningful and memorable in the minds of your employees.
Focus on your organization’s strengths. It’s fitting that a company like IDEO would promote principles like “Encourage Wild Ideas” and “Build on the ideas of others.” Play to your strengths in crafting your values.
Make it meaningful. Slogans and taglines are not core values. Make your value statements rich and meaningful to your employees.
Once you’ve finalized your list of core values, it’s time to test.
Here’s a quick checklist to test the integrity of your new core values:
Studies show that values have to be internalized by employees and integrated into the culture for them to have a meaningful impact. Here are eight tips on making this happen:
1) Clearly define, explain, and articulate your values to your employees.
Most of the core values from the organizations we’ve studied are backed by significant context for each one. This might take the form of a one paragraph description, a company video, or a slideshow to bring each value to life. The more depth, texture, examples, and images you can give to each value, the more power they will have.
2) Educate your organization on your values.
This is vital. If you don’t constantly educate your team and reinforce the importance of your values, they will become mere slogans and will not influence company culture. Hold a special company meeting denoted to rolling out and discussing your new value. Make your values an on-going part of your corporate dialogues.
3) Hire employees who embody your values.
If you’re doing a good job promoting, educating, and embodying these values as an organization, talented people aligned with these values will likely seek you out. Either way, it’s imperative that you hire for the attitudes and behaviors that shape your culture. If not, your new hires will only weaken your organization—no matter how talented they might be.
4) Defend and uphold your corporate values.
If you’re going to establish core values that define your corporate culture, what are you going to do when an employee clearly doesn’t honor them? You can’t change a person’s values; you can only hire people who share the same values. If you don’t let this employee go, what message are you sending about the importance of these values? Your core values shouldn’t be altered in difficult situations like economic downturns. These values were established as a guidepost to see the organization through both calm and rough waters. Your values should be timeless, sustainable, and unchanging.
5) Reinforce your values with consistency.
Using values in your business is like any other business discipline. All disciplines require consistency and practice.
6) Bring your values to life through storytelling.
Keep your values fresh and relevant. Employees will ignore a wall plaque within days, if not hours. Continue to challenge yourself to find ways to keep your values fresh and alive in your employees’ minds. Take note when employees and team members are actualizing the values. When you reward and recognize these behaviors, be sure to share it with your organization. Ask employees to share stories of how they saw one of their core values in action within the past week. Storytelling of this nature is one of the best ways to encode these values in your employees’ minds and to give them a life of their own.
7) Make sure leadership embodies each value.
Recognize and rate your leaders and employees on how well they embody the core values as part of performance reviews. If the leadership of your enterprise doesn’t live the core values, you can’t expect that your employees will.
8) Promote your values on your website.
Remember that actualized corporate values will act like a homing beacon for talented people who share your values. The About Us or HR section of your corporate website is a great place to highlight the unique features of your culture. (See below for excellent examples.)
With intention, energy, and a healthy dose of creativity, your values will remain relevant and meaningful. Keep the story alive. Discover your culture’s shared values and live them every single day. It will lead you to a stronger organization.
Can we determine which companies take core values seriously just by looking at their websites? Can we get an accurate feel for a business’s unique culture from the web? In many (but not all) cases, the answer is “yes.”
It’s also not too difficult to determine which companies aren’t taking core values seriously. Many corporations have a page on their website that lists its vision, mission, and values in their About or Human Resources section that lacks passion, emotion, creativity, and uniqueness. It’s as if a single company executive filled out a form in an effort to complete an assignment.
Remember that authentic corporate values will act like a homing beacon to talented people who share your values. The About or HR section of your corporate website is great place to highlight the unique features of your culture. It’s a simple tactic that too few businesses are using.
Here are a few noteworthy examples:
Notice that companies that are actively using core values to support their corporate culture tend to provide significant context for each of their chosen values. Beyond a simple word or phrase, they can clearly define what their values mean to them. And, that helps bring their values to life.
Naturally, the organization’s practices—both internally and externally with customers—must be congruent with their shared values. You must first discover your core values and the make them stick.
While an attractive culture section of your website obviously isn’t enough to lure talent, showcasing your values and the unique elements of your culture is a powerful and often underutilized tool for recruiting and attracting talented employees.
Our discussion on the importance of core values has focused on the benefits and application in cultivating a distinct corporate culture. But what is the relationship between core values and your customers?
Your core values define the ideal behaviors of your employees and the principles by which your organization operates. Some of these values may be relevant to your customers, others are not.
So should you promote your core values directly to your customers? Generally, the answer is no. But, there are exceptions.
Zappos, for example, has built their brand around their ten core values. They go so far as to print one of their ten values on every package they ship to their customers, highlighting the importance they place on these values.
There are three benefits to this approach: (1) It makes Zappos stand out as a unique brand and not just another online retailer; (2) it works to attract customers that share the same core values; and (3) it helps the company attract employees that share their values.
But for the most part, customers don’t specifically need to know your corporate values. If they’re interested, they’ll Google you.
Your customers do, however, need to observe how well you actualize your core values on a subconscious level. If you have a core value of “Wowing your customers,” wow them. If you have a tenet of putting your customers first, put your customers first. Not living up to your values won’t just impact your company culture; it will hurt your relationships with your customers.
Values extend in two directions: Inward to influence and guide the company’s culture and outward to communicate to its customers.
The inward direction, as we’ve seen, is discovered by the organization itself. The outward direction is based on the collective consensus of the business’s customers.
Branding, remember, is a co-authored experience with your customers. Your customers will determine for themselves what they believe your organization values based not just on what you promote or say, but on what they observe and feel.
Let’s make a distinction between corporate values and brand values: Corporate values are determined by you. Brand values are influenced by you, but largely determined by your customers.
The experience they have in their interaction with your brand will determine their perception of your brand’s values. If those perceived values are consistent with their own, they are more likely to do business with you. (And our firm as observed an unquestionable correlation between values alignment and customer loyalty—especially in cult brands.) If, however, those perceived values are in discord with their own, they may actual despise your brand.
While you may have anywhere from 3 to 12 shared values in your business, your customers will likely define you by a single value.
For illustration purposes, below is a list of successful brands and the brand value most likely perceived by their customers.
| Company | Primary Brand Value |
|---|---|
| Apple | Creativity |
| Harley-Davidson | Freedom |
| Oprah | Self-empowerment |
| Southwest Airlines | Love (Their stock ticker symbol: LUV) |
| Nike | Victory |
| Zappos | Happiness |
| IKEA | Possibility |
| The Life is Good Company | Optimism |
| Whole Foods Market | Wholesome |
| Coca-Cola | Happiness |
| Virgin | Free-spirited |
| Ritz-Carlton | Exceeding expectations |
| LL Bean | Quality and assurance |
| Amazon | Ultimate convenience |
| Accessible information | |
| Walmart | Guaranteed lowest prices |
| Target | Affordable design |
| Starbucks | Energy for your day |
| Under Armour | Dominance |
| Home Depot | Do-it-yourself |
It’s difficult to get your customers to associate your brand with a specific value. It certainly doesn’t happen by accident. It takes a consistent branding and marketing strategy, executed year after year.
But more than that, the company itself must find ways to live the value they represent. For as soon as they don’t, that position will begin to wither in the customers’ minds.
Upholding that value, however, places the company is in a unique position in the marketplace, one that its competitors have difficulty breaching.
Who would have thought values could be the ultimate competitive advantage?
While the importance of core values is continually gaining traction within the business community, there’s one group of businesses that has been hip to the idea for decades.
Cult Brands—brands with an unusual level of customer loyalty and an established community of engaged fans—almost always have well-established core values. (See Examples of Core Values From Successful Brands above.)
Why is this so? Customers rally around certain brands because they believe those brands stand for something meaningful to them. That is, customers become more loyal when they believe a business shares their values.
And while marketing messages and other branding efforts can help communicate these values, if these values don’t genuinely exist within the corporation itself, customers eventually find out.
In order for a business to effectively communicate its values to its customers, these values must be expressed throughout each customer touchpoint. This includes every potential interaction customers have with employees—whether in person, on the phone, via email, chat, Twitter, or Facebook. And if employees aren’t living these values—if the corporate culture isn’t consistently actualizing them internally—the gig is up.
Core values offer savvy CEOs a powerful way to unite both employees and their customers under a common flag. They can help you retain talented people and attract more loyal customers.
The task of discovering a corporation’s core values is generally conducted within the organization. While some companies hire consultants to help unearth their values, the source of input is almost always the executive team. The Seven Steps to Discovering Your Company’s Core Values is a process any CEO can lead his or her team through whether it’s a 10-person startup or a 20,000-person multi-national empire.
But there’s a vital missing ingredient in the process of discovering core values and brand values: input from the customer.
Why would you want to get your customer’s take on your values?
Two reasons:
First, you understand that the purpose of business is to create a customer, as Peter Drucker noted. Your customers are the reason for the existence of your organization. Shouldn’t their input matter?
Second, your customers—the ones who genuinely care about you, at least—already believe that your organization upholds a certain set of brand values. This is vital information for the initial stages of your discovery process.
Think of your customers as a large consulting team ready to give you feedback and an outside perspective based on their experiences and interaction with your organization. What better stream of insights can you hope to tap?
Only surveying your customers about what they believe you value isn’t likely to yield meaningful results. The concept of values are too abstract for many people; too much explanation and discussion is needed to make a direct fill-in-the-blanket question effective.
Determining your brand values and assessing your core values, however, can be accomplished using more advanced psychological methods involving direct interaction with your best customers.
Your customers’ input can bring the added magical ingredient in your efforts to discover your core values, and especially your brand values. Be sure to bring your customers into the discussion.
Need help unearthing your core values and your brand values? Drop us a line.
Perhaps the most important thing to take away from Maslow’s Hierarchy of Human Needs is his realization that all human beings start fulfilling their needs at the bottom levels of the pyramid.
In short, we fill our lower physiological needs first. Needs like safety, esteem, and social interaction are insignificant when one’s drive is to survive.
What is important to keep in mind is that these needs do not emerge in an all-or-none fashion; the majority of people in modern society have all of their needs partially met, with the lower needs having a greater level of fulfillment than the higher needs.
The higher needs are, therefore, greater generators of desire than the lower needs. As Maslow noted, “Man is a perpetually wanting animal.”
This quick refresher on Maslow and his Hierarchy of Human Needs is helpful because many of Maslow’s findings reveal what makes companies with Cult Brands so successful.
Maslow’s writings expose the underlying drivers of human behavior and decision-making. He never mentions “brand loyalty” in his books, but his Hierarchy of Human Needs and concepts like self-actualization are key to understanding why customers consistently choose one brand over another and why they build strong relationships with particular brands.
The makers of Cult Brands aren’t like mainstream marketers whose focus is largely on selling “feature-benefits” from the bottom of the pyramid to their customers. Rather, Cult Branders enjoy incredible loyalty because they work hard to connect with their customers at the very highest levels of Maslow’s Hierarchy.
Cult Brands all have products and services with great “feature-benefits,” but their products and services also fulfill the higher-level needs of esteem, social interaction, and self-actualization found at the top of Maslow’s Hierarchy.
So, why is fulfilling higher-level needs so integral to building customer loyalty? The answer: higher-level needs influence future human behavior much more than lower-level needs.
Businesses that can fulfill human needs on the higher levels of the hierarchy become irreplaceable in the mind of their customers. This is the key to customer loyalty.
True customer loyalty is not only about getting a customer to consistently choose your brand over another—it’s for that same customer to always believe (and tell the world) that your brand has no equal!
For some people, the word “Cult” is enough to make the hair on the back of their neck stand up. Thoughts of Jim Jones and David Koresh spring easily to mind. These renowned cult leaders certainly had their followers, but they didn’t lead them anywhere good.
It’s important to understand that there are both benign and destructive cults: benign cults don’t harm their followers; destructive cults do. The fanatical devotion exhibited by Apple aficionados and Harley owners exhibit behavior that is certainly cult-like, but no one is harmed as a result of their affections.
Benign cults build their members up; destructive cults tear their members down.
We turn to Rick Ross , one of the nation’s leading experts on cults, for a more in-depth explanation. For over twenty years, Rick Ross has studied cult groups and has helped rescue family members trapped inside cult compounds.
Ross describes destructive cults as “groups with an absolute authoritarian figure at the top of a pyramid scheme of authority where there is virtually no accountability for that leader.” This is where you see the Jim Jones type of dynamic at play: the leader is a super-star who has absolute control.
Cult Brands are different because it’s not at all necessary for people to know who’s in charge for them to form a relationship with the brand. Lots of people know Steve Jobs was at the core of Apple’s success, but the average customer doesn’t know who is at the helm of IKEA, Whole Foods, or even Harley-Davidson.
Destructive cults hurt, harm, manipulate, and often brainwash their members. The leader of a destructive cult really doesn’t care about the well being of its members. In fact, such leaders openly exploit and abuse their members, usually for their own personal benefit.
Benign cults have one trait in common with their negative counterparts: the intensity with which the cult members are attached to the object of their affection. Ross describes a benign cult as “any group of people that are intensely devoted to a person, place, or thing,” but where the relationship between the follower and the cult is harmless, benign, or even positive.
Benign cults are never destructive. They don’t harm or injure their followers either physically or mentally. Benign cults have leaders who are accountable to the group, and the leaders value the feedback of their followers.
Benign cults are inclusive. They welcome anyone who wants to belong. There’s no price of admission—you don’t need to live in Key West to be a Parrothead: simply being enthusiastic about the brand is enough. This is an important point of differentiation from destructive cults, which are exclusive, shutting out anyone who doesn’t fit a specific set of criteria.
The important thing about benign cults is that they help fill the emotional wants and needs of their followers in a positive way. There are clear, easily identifiable, objectively observable benefits that are derived from membership in a benign cult.
Watch this presentation to get a better understanding of why loyal customers often gather together:
No one wants to own a mediocre brand, but few businesses take the steps necessary to become a dominant brand. Brands that don’t actively work to differentiate are generally defined and controlled by their competitors. In a cluttered marketplace of indistinguishable brands, developing a strong position in the heart of the customer is extremely challenging.
In the world of retail brands, you either grow or die—there’s no in-between. In most cases, the winner of this game for the customer’s heart takes all, leaving the rest of the competition struggling for minor market share.
In order to develop a strong position in the marketplace, brands have to understand three key ingredients for developing a strong retail marketing strategy: relevance, growth potential, and category leadership.
Everything (including your advertising) must create value for your customer. Anything that does not create value weakens your relevance in the customer’s life. When the customer no longer finds value in your promise, the relevance dies and the customer does business with your competitor.
This is what happened to K-Mart as Walmart became more relevant by having what the customer wanted (deep inventory), when the customer wanted it (open 24-hours a day), at the price the customer wanted to pay (low price always, always). Combining these merchant-champion qualities with “real people” advertising of their associates and customers, and the resulting relevance factor was beyond anyone in their category.
Even today it is hard for other retailers to be as relevant in the customer’s life as Walmart is for the general public. This is simple to see when you consider the fact that 35 million people choose to shop at Walmart every day. Many studies showed that customers drove right past K-Mart in order to get to Walmart. The power of a relevant brand!
A powerful brand helps its customers achieve growth. As people are always evolving, they tend to favor those who help them along their life’s journey to grow and gain what they want. This is a crucial point: your brand has to give your customers a potential to grow from the interaction with the brand in a personal way. If the individual does not derive any growth from the interaction with the brand, the business enterprise failed at all levels—they didn’t have the foresight to think through the problem all the way to the customer.
It is important to remember that each of your customers is attracted to your brand for their own reason, not yours. Most marketing managers start by looking at their business rather than the customer who is growing from this interaction.
The successful retailer Build-a-Bear is a clear example of how to offer growth potential to each customer. By designing the experience of building a bear as a workshop, each customer is able to create his or her own unique teddy bear, giving it a name, a birth certificate and registering it to the creator’s name. Customers describe the experience as “personally enriching,” as they are allowed to create their new best friend. Build-A-Bear earns twice the national average per square foot of mall retail space. It pays to help your customer grow.
Southwest Airlines summarizes this idea best when their former leader, Herb Kelleher, said, “I will tell your our strategic plan, its called doing something.” As crazy as this sounds, most companies don’t do anything to establish category leadership.
Most brands, by default, choose the tried-and-true path and take their place in the rankings by simply doing what they have always done. In order to develop brand leadership, you have to own your category. There is no way around it; there can’t be anyone else that serve your specific customers better than you do. Great brands always stand alone.
Leading the pack is not easy, and it’s not for every business. Creating market dominance means constant attention to the customer by taking meaningful action. Great brands are in a constant conversation with their customers, associates, and partners. At each point in the chain they strive to add value and stand apart from their competitors with a strong retail marketing strategy.
1: great devotion to a person, idea, object, movement, or work
2: a system of religious beliefs and ritual
3: In the 1930s cults became the object of sociological study in the context of the study of religious behavior.
For some people, the word “Cult” is enough to make the hair on the back of their neck stand up. Thoughts of Jim Jones and David Koresh spring easily to mind. These renowned cult leaders certainly had their followers, but they didn’t lead them anywhere good.
It’s important to understand that there are both benign and negative cults. Benign cults don’t harm their followers, while negative cults do. The fanatical devotion exhibited by Apple aficionados and Harley owners exhibit behavior that is certainly cult-like, but no one is harmed as a result of their affections. Benign social groups build their members up; negative cults tear their members down.
We turn to Rick Ross, one of the nation’s leading experts on cults, for a more in-depth explanation. For over twenty years, Rick Ross has studied these groups and helped rescue family members trapped inside their compounds.
Ross describes destructive cults as “groups with an absolute authoritarian figure at the top of a pyramid scheme of authority where there is virtually no accountability for that leader.” This is where you see the Jim Jones type of dynamic at play. The leader is a super-star who has absolute control. Cult Brands are different because it’s not at all necessary for people to know who’s in charge for them to form a relationship with the brand. Lots of people know Steve Jobs was at the core of Apple’s success, but the average customers doesn’t know who is at the helm of IKEA, Whole Foods, or even Harley-Davidson.
Destructive cults hurt, harm, manipulate, and often brainwash their members. The leader of a destructive group really doesn’t care about the well being of its members. In fact, such leaders openly exploit and abuse their members, usually for their own personal benefit.
Benign cults have one trait in common with their negative counterparts. That’s the intensity with which the members are attached to the object of their affection. Ross describes a benign cult as “any group of people that are intensely devoted to a person, place, or thing,” but where the relationship between the follower and the leader or group is harmless, benign, or even positive.
Benign cults are never destructive. They don’t harm or injure their followers either physically or mentally. Benign social groups have leaders who are accountable to the group, and the leaders value the feedback of their followers.
Benign cults are inclusive. They welcome anyone who wants to belong. There’s no price of admission—you don’t need to buy a Harley-Davidson motorcycle to be part of the Harley community: simply being enthusiastic about the brand is enough. This is an important point of differentiation from negative cults, which are exclusive, shutting out anyone who doesn’t fit a specific set of criteria.
The important thing about benign cults is that they help fill the emotional wants and needs of their followers in a positive way. There are clear, easily identifiable, objectively observable benefits that are derived from membership in a benign brand group.
There are many weak brands and Average Joe brands out there. There are even numerous iconic brands in the world, which most other companies aspire to be. But few brands ever develop a deep, penetrating relationship with their customers. Few brands truly win the heart’s of their customers, which breeds authentic customer loyalty. Few brands ever adhere to the rules – knowingly or not — that define a Cult Brand.
Here are 21 of the most powerful Cult Brands and how this powerful form of marketing has shaped their relationship with their customers and Brand Lovers.
Retail is the sale of goods and services from businesses to an end user (called a customer). Retail marketing is the process by which retailers promote awareness and interest of their goods and services in an effort to generate sales from their consumers. There are many different approaches and strategies retailers can use to market their goods and services (see below).
Retailers use various advertising and communication tools to grow awareness and consideration with future customers. Finding the right marketing mix can lead to profitable growth and a higher return on investment. By considering the right advertising strategy retailers can persuade consumers to choose to do business with their retail brand. The fundamental approach used by modern retailers in marketing their products is the Four Ps of Retail Marketing.
Product: There are two primary types of merchandise. Hard or durable goods like appliances, electronics, and sporting equipment. And soft goods like clothing, household items, cosmetics, and paper products. Some retailers carry a range of hard and soft items like a supermarket or a major retail chain while many smaller retailers only carry one category of goods, like a boutique clothing store.
Price: Pricing is a key element of any retail strategy. The retail price needs to cover the cost of goods as well as additional overhead costs. There are four primary pricing strategies used by retailers:
Everyday low pricing: The retailer operates on thin margins and attracts customers interested in the lowest possible price. This strategy is used by big box retailers like Wal-Mart and Target.
High/low pricing: The retailer starts with a high price and later reduces the price when the item’s popularity fades. This strategy is mainly used by small to mid-sized retailers.
Competitive pricing: The retailer bases the price on what their competition is charging. This strategy is often used after the retailer has exhausted the higher pricing strategy (high/low pricing).
Psychological pricing: The retailer sets the price of items with odd numbers that consumers perceive as being lower than they are. For example, a list price of $1.95 is associated with spending $1 rather than $2 in the customer’s mind. This strategy is also called pricing ending or charm pricing.
Place: The place is where the retailer conducts business with its customers. The place can be a physical retail location or a non-physical space like a catalog company or an e-store. While most retailers are small, independently owned operations (over 90%), over 50% of retail sales are generated by major retailers often called “big box retailers” (see the list of the top 20 big box retailers below).
Promotion: Promotion is the final marketing mix element. Promotions include personal selling, advertising, sales promotion, direct marketing, and publicity. A promotional mix specifies how much attention to pay to each tactic, and how much money to budget for each. A promotion can have a wide range of objectives, including increasing sales, new product acceptance, creation of brand equity, positioning, competitive retaliations, or the creation of a corporate image.
In recent years, to address the need to take a more customer-oriented approach to marketing, the 4 Ps of Retail Marketing have been revised and replaced by the 4 Cs: Consumer, Cost, Communication, and Convenience.
Consumer (versus Product): Instead of focusing on the product the retailer wants to sell, a smart retailer studies the wants and needs of its consumers before going to market. The more clearly a retailer understands the wants and needs of its customer base, the greater chance it will have of attracting customers and increasing sales.
Cost (versus Price): In retail, a cost is the value of money that has been used up to produce something. Factors that influence cost include the customer’s cost to change to a new product and the customer’s cost for not selecting a competitor’s product.
Convenience (versus Place): The Internet has made Place less of a factor in consumer purchasing decisions. Convenience addresses the ease of completing a transaction including the ease of finding information about a product, finding the right product, and purchasing a product.
Communication (versus Promotion): Communications includes a range of efforts including advertising, public relations, grassroots efforts, social media, and any other form of communication between the company and the consumer.
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In some parts of the world, the retail industry is still dominated by small family-run stores, but this market is increasingly being taken over by large retail chains. The retail landscape continues to evolve, with e-commerce giants and discount chains playing an increasingly prominent role. Here’s a look at the top 20 retailers in 2022 based on total company revenues according to the National Retail Federation [NRF]:
| Rank | Company | 2022 Worldwide Retail Sales (billions) |
|---|---|---|
| 1 | Walmart | $600.94 |
| 2 | Amazon.com | $343.33 |
| 3 | Costco Wholesale | $217.53 |
| 4 | The Kroger Co. | $147.62 |
| 5 | The Home Depot | $155.42 |
| 6 | Target | $107.59 |
| 7 | CVS Health Corporation | $106.59 |
| 8 | Walgreens Boots Alliance | $116.10 |
| 9 | Lowe’s Companies | $93.61 |
| 10 | Albertsons Companies | $76.15 |
| 11 | Apple Stores / iTunes | $80.30 |
| 12 | Royal Ahold Delhaize USA | $92.14 |
| 13 | Publix Super Markets | $54.53 |
| 14 | Best Buy | $46.19 |
| 15 | Aldi | $124.25 |
| 16 | TJX Companies | $48.94 |
| 17 | Dollar General | $37.88 |
| 18 | H.E. Butt Grocery | $36.80 |
| 19 | 7-Eleven | $86.11 |
| 20 | Dollar Tree | $28.36 |
Contact us to discuss how you can better prepare for what’s ahead. We can help you identify ways for your organization to tap into the power of cult branding, create value, and ultimately thrust your performance.
The reason that Apple and other industry-dominating organizations, like Harley-Davidson and IKEA, consistently beat out their competition is that they have a deep, comprehensive understanding of who their best customers are.
Truly knowing your customers requires moving beyond demographic data into the nuanced realm of human nature, a zone where imagery, color, and emotional tone are more powerful than logic or price. Up to 90 percent of all customer behavior is unconscious. We come hard-wired with deep seated wants, needs, and desires that play a critical role in every decision we make—whether or not we’re aware of them.
It is by delving into the unconscious motivators that guide an organization’s best customer’s decision making process that a dominant organization can realize an unbeatable competitive advantage: predictability. When you understand what causes your customers to act the way they do, you can predict, with a high degree of certainty, how they’ll react to any change in the customer-brand relationship. That could mean a new product, a new marketing message, or the way you set up your physical retail space or website. Knowing customer reactions ahead of time allows you to pick the most profitable endeavors and side-step the mistakes—before you make them.
What does this look like in the real world? Here are four ways dominant organizations have leveraged their superior customer understanding:
Once upon a time, Burger King had the #2 position in the fast food market sewn up tight. Lately, however, it’s not so good to be the king. An inability to correctly identify, understand, and connect with their target market has resulted in lackluster performance at home and overseas, while an ill-advised marketing campaign featuring a creepy, cartoonish King alienated more customers than it attracted. Meanwhile, Wendy’s is winning by honing in on the profitable upscale end of the fast food marketplace and determining, in great detail, what those customers want and continually evolving their menu to delight those customers. The recipe works: today Wendy’s is very close to capturing the #2 position.
It is no coincidence that Volkswagen is highlighting their car’s safety record at the exact point when the majority of their most loyal customers are starting their families. We all come equipped (standard issue!) with the need to nurture; this is one of those biologically drivers humanity relies upon to ensure the continuation of the species. There is no point at which this drive is stronger than when one is in the presence of a small infant. The marketing campaign for the Jetta is aimed directly at the unconscious, with strong, nurturing men—at times holding actual babies—discussing the safety and security the brand offers. Sales of the Jetta have been record breaking.
Snickers was struggling to find their place in a crowded market. One big problem was they were attempting to sell candy bars to people who didn’t particularly want candy bars. The company analyzed their sales patterns, hoping to discern who was buying their candy. This research revealed that peak purchasing times happened mid-afternoon; construction workers on break and kids on their way to basketball practice valued the role Snicker’s plentiful peanuts played in quieting rumbling stomachs. This was a pivotal insight. Snicker rebranded itself not as another type of candy, but as a hunger buster. The tag line, “Hungry? Why wait?” helped emphasize the primary value that was already causing people to choose Snickers, an approach that was so effective that today, Snickers is the world’s leading candy bar.
As the Chinese marketplace continues to evolve, dominant organizations are already taking steps to establish their presence efficiently and effectively. Rolls Royce delved deeply into the culture of China, immersing itself in the country’s metaphorical language and powerful symbology before designing their Special Edition Year of the Dragon Phantom.
The maroon car, which comes with custom embroidery and gold painted dragons, does an admirable job embodying luxury for consider a consumer base that has been raised with markedly different experiences, iconography, cultural narratives, values, and mores than that of the maker. Each one cost $1.2 million. The entire production run sold out in less than 2 months.